The National Credit Union Administration filed a lawsuit Thursday against Credit Suisse Securities (USA), citing misrepresentations in the underwriting and sale of mortgage-backed securities.
The NCUA said in a statement that three failed credit unions paid more than $715 million for the securities at issue in the lawsuit, which was filed in U.S. district court in Kansas. The failed credit unions that purchased the securities are the U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, and Southwest Corporate Federal Credit Union.
The suit alleges that Credit Suisse underwrote and sold securities that were "significantly riskier than represented" in related prospectuses and registration statements. Credit Suisse officials declined to comment. The credit union regulator has been trying to recoup losses related to the failure of five institutions seized by NCUA in 2009 and 2010 after they ran into trouble because of the crumbling housing market.
The NCUA previously filed lawsuits against other financial institutions including JP Morgan Chase & Co's JPMorgan Securities, Royal Bank of Scotland Group Plc's RBS Securities, and Goldman Sachs.
The NCUA in November 2011 negotiated settlements totaling just over $165 million with Citigroup and Deutsche Bank Securities.